Predict360 Enterprise Risk Management
Every risk manager knows the basic risk management principles, but those are the principles which are applicable now. The financial sector is home to some of the most innovative countries in the world.
The financial sector is always interested in using the latest available technologies to gain an edge over the competition. It is also a very heavily regulated industry where regulatory change is the one true constant. These are two opposing forces acting on the sector – the competitive force which forces businesses to innovate, and the compliance force which restricts business activity according to laws and regulations.
We are now at the tipping point. Multiple press releases, decisions, and speeches by institutions and people associated with regulatory bodies have encouraged innovation and talked about how we need to update the way banking is regulated. This change is necessary because the innovations that are on the horizon will make banking more secure, efficient, and convenient, but are not being tested because they may not be compliant.
Go in more depth with our blog post Three Risk Management Techniques for Small to Mid-Sized Businesses
This also changes risk management greatly – we will have to rethink the way risk is managed. Risk right now is managed mostly with the help of manually collected information, analysis, and the industry links of the professionals managing risks. The future, with risk management technology, will require new risk management principles.
The Automation of Risk Management
When we talk about automation, we aren’t just talking about software-based automation. Software is just one part of the automation framework. Software based risk management solutions are currently the best solutions for businesses, because we lack the external hardware in the field. If you want to see how risk management will be handled in the future, the best place to look is the agriculture industry. Automation is now becoming mainstream in the world of agriculture. There are products by leading agriculture tools and vehicle manufacturers which allow full automation of farming. They provide the software and the hardware necessary for the automation, and this hardware has hints for how automation will work in the financial sector.
Few months back we published Five Steps of the Digital Risk Management Process be sure to read.
The biggest puzzle in automation is figuring out inputs. We can design and develop the software that can make sense of data for automation, but we need to generate that data first. This data is generated in the agriculture industry with the help of sensors and drones. There are sensors placed across the field which report the amount of nitrate in the soil, the health of the plants around the sensor, the air quality, and how much water the soil has. This sensor network forms the backbone of the automation process. The drones are there for inspection – if any sensor reports something out of the ordinary, the drone goes out to investigate. The farmer can access all this data from their executive dashboard, allowing them to manage their fields without ever going out into the field.
Have a look at how the risk mapping, predictions, live holistic view, dashboards, and much more will help your business manage risk better than ever before.
True risk management framework will require a similar network of sensors. Automation will only truly work if we have sensors in place which can detect increasing risks. A major difference in agriculture and finance is that the financial sector usually worries about external risks – and no business can place sensor networks in other business and industries. We will instead need to wait until industries themselves start deploying sensors. The sensors which can create the data for risk management solutions will also help the businesses themselves – these sensors will help make businesses more efficient.
Until then we will only have stopgap solutions. There are a few solutions which employ manual risk managers to give the illusion of automated risk management, and then there are solutions like Predict360 which combine manual data entry with automation. True automation is still decades away but there are many interesting technologies which businesses can use to improve risk management and risk predictions.
The Predict360 risk management solution is an easy to implement cloud-based solution specially designed for flexibility. It works great in the smallest of businesses and the largest of businesses. If you want to see how the solution will benefit your business, then get in touch with our team for a demo and a trial.